DUBAI

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Wednesday, June 13, 2012

I have been working as a manager and partner in a company for three years. For more than six months I have not received my salary as a manager in the company, although as per the memorandum of association I am entitled to a monthly salary plus 20 per cent of the profits. Presently, a dispute took place between me and other partners on the issue of salary, as the company is not making any profit, according to the partners, and it may be shut down. My question here is whether I am entitled to file a complaint before the Ministry of Labour claiming my overdue salary. Please advise me in this regard and how to withdraw from the partnership contract.

I would like to clarify to the questioner that as a manager of a company he should not claim his salary before the Ministry of Labour as the questioner is a manager and partner and his residence is related to the GDRFA and the Ministry of Labour has no jurisdiction with regard to the dues of the partners. However, the questioner should refer to the company’s memorandum of association, especially the clause related to the manager and the way of the withdrawal of a partner and how to dissolve the company. Therefore, the questioner may call the partners for a meeting to settle the matter amicably or refer to the competent court. In case of failure note that the memorandum of association mentions the method to be followed in case of a disagreement among partners.

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When someone is ignored or not taken seriously, this will add fuel to the fire, that much quicker, and the need for a formal process to take place may be needed.

This formal process may well take the form of an internal investigation, but not all investigations are handled by people with sufficient training and expertise.

Boardroom disputes will probably land on the HR Director’s desk for resolution, so here are some pointers that may help manage this highly sensitive and challenging situation.

Be objective

Neutrality is vital and one must be careful not to take a partisan position. The chances are that you will need to listen carefully to both sides point of view [individually and then together] in order to bring about a satisfactory conclusion.

Attentive listening

You need to listen to not only “what is said” but also to “what is not being said”.

This is called “the music behind the words’”.

Not everyone will be comfortable to start talking immediately and may need encouragement and some gentle probing skills to get started, which should take the form of open questions, use of pauses, silence, paraphrasing and reflection.

Individuals need to feel that they can vent their anger without fear of retribution or break in confidentiality.

One must be careful not to jump to conclusions or have a pre-conceived idea of the situation, prior to the interview.

Trust and empathy need to be established so that each individual feels comfortable in speaking without fear.

Different perspective

Once trust is established, then it is the role of the mediator to encourage both parties to try and see the situation from the other person’s point of view.

This is not easy and care and sensitivity will be needed. Looking at what has taken place in the past or previous conversations that have got out of hand, can be useful.

When this process starts, some individuals will hopefully begin to see that there may be issues on both sides that need resolving.

It is sometimes very useful to ‘role play’ a particularly upsetting episode from the past and introduce different ways that it could have been better managed.

Realistic expectations

It is important to set realistic expectations of what can and cannot be achieved by both parties. Don’t set the bar too high in case such expectations cannot be realised.

People may think that miracles happen overnight — but unfortunately, they don’t!

Mediating between both parties

Once you have gained the trust and respect of both parties individually, they will hopefully have opened up a new perspective, and then will be the time to bring them both together.

I have been working for a company for more than one year on a limited contract which expires in two months. My question is, in case I revoked the contract, how will the compensation be calculated by the employer? Will it be 45 days from my salary and will it be counted from basic salary of the total salary? Does the employer have the right to ask the Labour Ministry to put a ban for more than six months? And in case he puts a ban, will it be applicable to Free Zone areas? I need to cancel and join a new job because I got a very good offer from a good company. Please clarify.

Article No 116 from the Labour Law indicates the following:Where a contract is revoked by the worker for reasons other than those specified in Article (121), he shall be required to compensate the employer for any prejudice the latter sustains as a result: provided that the amount of compensation shall not exceed half the worker’s remuneration for three months or the residual period of the contract whichever is shorter unless the contract contains a provision to the contrary.

Therefore, if the questioner revoked the contract, he will be violating the mentioned Article and the competent court may ask him to compensate the employer.The compensation amount will be calculated as per the full salary, not basic salary. In addition to that, the employer has the right to ask the Labour Ministry to impose a one-year ban. But this type of ban is not applicable in free zones

Abu Dhabi: The authorities’ new requirement of a tenancy contract and copies of utility bills to get a residence visa has not been reverted but only postponed, a top official has confirmed to Gulf News.

“The implementation of the decree is not immediate, as the authorities are allowing a grace period for people to return from the summer holidays, and people will be informed of the dates when this becomes mandatory,” the official said.

“

The decision is not targeting any party or property group but it will serve those departments seeking accurate data about foreigners’ residences

”

Major General Nasser Al Awadi Al Menhali

Earlier, the rule was to be implemented from June 1

According to Major General Nasser Al Awadi Al Menhali, the Assistant Undersecretary of the Ministry of Interior for Naturalisation, Residency and Ports Affair, requesting a copy of the housing contract or electricity and water invoice to issue a residency visa, is an administrative decision aimed at maintaining accurate records of people’s places of residence.

“Many residents change their addresses, and it has become difficult for the authorities to reach them. Labourers, whose companies provide them with group housing, have to provide a document that states their address along with a letter from the company, or any contract document, that proves where they live,” Al Menhali said.

Gulf News broke the story last week that tenancy contracts and electricity bills would be mandatory to renew a residence visa or to apply for a new one from June 1.

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“The decree aims primarily to provide addresses of all residents for security purposes. The decree does not target a specific category of people, but rather provides the residency sector with accurate, updated and correctly documented database,” Al Menhali said.

“The procedure will be unified across the UAE. It is a procedure that is applied worldwide and not only in the UAE,” he added.

A residency official told Gulf News that the new decision is aimed at improving living conditions, as well as maintaining an accurate census of families living in the UAE and the number of members in each family.

“This procedure is to prevent more than one family from living together as currently four or five families share the same housing,” he said.

“Families will not be allowed to share housing,” he added.

Responding to queries Al Menhali said those sharing accommodation must also present proof of their residence by submitting a tenancy contract or utility bill in their names.

“Those working with companies which provide them with collective accommodation must present proof of their residence, an address and a letter from the employer showing where he resides,” he added.

Al Menhali underlined that the new rule is primarily aimed at verifying the residence of all expatriates living in the UAE for security and procedural reasons.

“It is a security, administrative and service decision taken by the immigration and foreign affairs departments in the country”.

“The decision is not targeting any party or property group but it will serve those departments seeking accurate data about foreigners’ residences,” he added

Monday, June 4, 2012

There are ample opportunities for doing business in theUAE. At the present time the economy is booming - GDP having risen by 20.4 per cent in 2000. Although a significant proportion of that increase was due to higher oil prices. Government encouraged industrial diversification is also contributing to continuing economic prosperity. International manufacturers and exporters may conduct business with Dubai by concluding transactions directly with importers and traders who are already established in the market.

An Expatriate can choose either LLC or Free Zone to set up his new Company according to his/her requirements.

Limited Liability Company (LLC)Limited Liability Company where the liability is fixed according to the capital shown by the Company. In Abu Dhabi the minimum required capital for a company is AED 150,000 (US$ 41,000). The law also specifies for a foreign nationals ownership in this type of company is pegged at 49% and 51% would be held by a UAE national.Fifty-one per cent participation by UAE nationals or company owned 100% by UAE nationals is the general requirement for the Limited Liability Companies. Therefore the normal shareholding pattern for an LLC is:Local sponsor - 51%Foreign Shareholder (s) - 49%Only Limited Liability Company allows the company to trade directly in the local market. Majority of the Companies established in UAE are LLC’s.In Abu Dhabi professional activities (by expatriates) has to be set up as LLC.The time required to form a company will be approximate 1-2 weeks (depends on the activity and approvals required) from the date of receipt of all the documents. The procedure and cost breakup will be given upon request.

Branch of a Foreign companyForeign companies can set up their branches / representative offices in Abu Dhabi and owned 100%. The law only requires that a local service agent (UAE national) be appointed for such branch / representative office.

The branch is part of the parent company and it can carry on the business according to the activities (subject to approval) mentioned in the parent company’s license.Only UAE nationals or companies 100% owned by UAE nationals may be appointed as local service agents. Local service agents - also sometimes referred to as sponsors - are not involved in the operations of the company but assist in obtaining visas, labour cards, etc and are paid a lump sum fee per annum. The time required to form a branch of a foreign company is approximately 3-4 weeks (depends on the activity and approvals required) from the date of receipt of all the documents.

The application for establishing the branch should be accompanied with the parent company’s financial statement of last two years and other related documents.For companies related to construction and engineering the application must contain the details of executed projects and current projects are required to be submitted before the licensing authority.Retail companies cannot apply for the license for setting up the branch only manufacturing companies can set up their branch in Abu Dhabi.A representative office, on the other hand, is limited to promoting its parent company's activities, i.e. to gather information and soliciting orders and projects to be performed by the company's head office. Representative offices are also limited in the number of employees that they may sponsor. Procedures are same for representative office setup except two year financial statements are not mandatory.

Branch of a Local Company (UAE)

For carrying on business in Abu Dhabi it is compulsory to have a license issued by Abu Dhabi Economic Department. For a company established in any other emirate can carry on their business in Abu Dhabi. A company having a valid license issued by the Economic Department of any Emirate can establish their branch in Abu Dhabi. There is no requirement for appointing a separate sponsor for setting up the branch in Abu Dhabi. The activities allowed in the branch license would be the same(subject to approval)as the parent company’s.Any Company having valid license issued by any emirate in UAE can establish their branch in Abu Dhabi there is no requirement of capital or vintage.The detailed procedure and cost breakup can be availed via a request.

Free ZonesFree zones are established as independent jurisdictions which allow the expatriate entrepreneur to own a company wholly (100%) and offers single window administration. Free zones also do away with the requirement of appointing UAE national as partner / service agent (branch). This type of company is incorporated for carrying on international trade as business with local market (UAE) is restricted.For local (UAE) supply of goods the company has to pay 5% as customs duty and should be supplied through local distributors